| Trusts Classified |
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| Trusts are commonly classifed in two ways. The first way is by the duties of the trustee. The second way is by the intent, if any, of the settlor to create a trust. This article discusses generally these two ways of classifying a trust.More... |
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| Supplemental Needs Trusts versus Fully Discretionary Trusts |
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| The typical special needs trust (SNT) will directly or indirectly prohibit the trustee from making distributions to the beneficiary that are or may be used for "food, clothing, and shelter," because such distributions could disqualify the beneficiary for Supplemental Security Income (SSI) purposes or affect his benefits. In a fully discretionary trust, the trustee's duties and powers can range widely, dictated by the written terms of the trust. And distributions made from the trust to the beneficiaries can be mandatory or discretionary. In addition, the trustee's discretion can be guided by additional provisions of the trust.More... |
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| Executors - Family Business Issues |
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| The most difficult asset to administer in any estate is a family business. There are at least four major problems: (1) lack of liquidity - not enough cash to pay administration expenses, death taxes, and specific bequests; (2) lack of investment diversification - often all or most of a decedent's wealth is in one business; (3) non-marketability - it is hard, and sometimes impossible, to sell a minority interest in a family-owned business; and (4) the family's emotional involvement and company-employee relationships.More... |
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| Executors - Government and Fringe Benefits |
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| Government and work-related fringe benefits are not always treated as assets of the estate, so technically the collection of these benefits may not be the executor's legal responsibility. Social Security benefits, benefits payable under the Railroad Retirement Act, and benefits payable to the spouse and dependent children of government employees covered by civil service are paid directly to named beneficiaries, not to the estate. In many instances, however, the amounts payable to beneficiaries from these sources can be greater than those passing through probate, and it is the executor's responsibility to make the beneficiaries aware of the potential benefits to which they are entitled. If the benefits are paid to the estate, then their collection will be the executor's responsibility. If paid directly to named beneficiaries, the latter must still be fully informed by the executor of the nature and size of the benefits and the name of each recipient.More... |
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| Federal Estate-Tax Return - Deductions |
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| To be deductible, death-related expenses must be necessary, reasonable, allowable under state law, and have been paid (or be payable) by the estate. The IRS will attempt to disallow deductions for expenses that are not necessary to pay the dents or taxes of the estate or to preserve the estate or distribute it. More... |
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